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Supply-chain woes put the brakes on hyperscale data centers

While data-center staff have been classified as essential, like medical staff and grocery store staff, construction is taking a bit of a hit. In recent weeks, Facebook, Google, and Apple have announced a slowing of construction of major new data centers in the U.S. and Europe.

The problem, as it turns out, is not because construction is being ordered halted, or even due to a lack of IT equipment, but because other components of the supply chain like fiber optics, batteries, and racks are scarce, according to Rick Villars, vice president of data center and cloud research at IDC.

“We’ve been talking to people who haven’t made public statements yet, but the supply chain is the problem,” he says. “They are not stopping because they want to, but they don’t have materials to finish. That’s important but not the same as shutting down or not finishing buildings under way.”

The bulk of data center construction in 2020 is hyperscale providers – AWS, Microsoft, etc. – and colocation providers like Equinix and Digital Reality Trust. Enterprise-owned data-center construction is minimal, he says.

And building a data center is not done on a whim. These facilities are huge and run in the billions of dollars. Most of the data centers under construction now have been under construction for six to 18 months, Villars says.

He adds people are more unwilling to break new ground but even that is not cause for alarm because there’s an over-abundance of capacity, so issues won’t show up until 2021 or 2022.

Copyright © 2020 IDG Communications, Inc.

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